Rates
Slight Drop In Rates Across The Curve, With Lower Breakevens And A Flatter 5s30s TIPS Curve
Initial claims fell sharply to their lowest level since 1969, and focus is now on tomorrow’s CPI report, with core and headline inflation forecasted to jump to 4.9% and 6.8% respectively
Credit
The Rise In Rates And Moderate Widening In HY Spreads Took US$ Bonds Down Today
The huge tightening in US HY cash spreads at the beginning of the week (OAS down 37bp w/w) was amplified by the lack of dealer inventory, as the CS chart below shows
Equities
Positive, Though Less Impressive Performance Today In US Equities, Led By Telecoms And Healthcare
Of all the markets that have struggled this year, Hong Kong might be among those that see a positive reversal in 2022, with more clarity on the macro front, as well as supportive policies from Mainland China
FX
As Rates Volatility Recedes Slightly, Differentials Come Back To The Fore And Drive Yen Down, Euro Up Against The Dollar
Sovereign credit spreads have come down quite dramatically this week across emerging markets, benefiting currencies like the Mexican peso, Brazilian real, South African rand
Rates
US Front-End Rates And Volatility Fall, Curve Steepens As Market Awaits CPI Report On Friday
Good bounce in the TIPS 5s30s spread, as the reflation trade is seeing a little revival this week: lower front-end rates, delayed hikes, higher inflation breakevens, higher terminal rate
Credit
Positive Risk Environment, With Much Tighter Credit Spreads Across Both DM & EM
Issuers took advantage of the tighter spreads to launch large new offerings today: Merck took home US$ 8bn in 5 tranches and Emerson Electric raised $ 3bn in 3 tranches
Equities
Huge Day For S&P 500 Technology Stocks (Up 3.51%), As Well As Consumer Discretionary (Up 2.36%)
Volume and volatility are both down markedly since last week, as we saw a second straight day ending with over 86% of S&P 500 stocks up
FX
Risk-On Sentiment Takes The Canadian And Australian Dollars Higher, Following The Rise In Commodities
Although rates volatility remains high, most emerging markets did well today, with the tightening in sovereign credit spreads increasing the attractiveness of recently battered carry currencies like the Brazilian real
Rates
Rates Rise Again From The Front Out, With Labor Cost And Productivity Data Pushing Up Inflation Breakevens
The front end of the US yield curve is getting closer to pricing in 3 rate hikes through 2022, with the most likely path being (based on forward OIS rates) the first hike in May or June, the next one in September, and one more in December
Credit
Spreads Tighten Significantly Across The US Credit Complex, Though IG Bonds Still Fall On Higher Rates
Good start to the week for corporate bond issuance, with the largest offerings coming from Roche Holdings Inc (US$ 6 bn in 3 tranches) and Ecolab ($ 2.5 bn in 4 tranches)
Equities
86% Up Day For S&P 500 Stocks, As Value And Small Caps Outperformed Growth And Large Caps
Chinese equities are bouncing tonight after the PBOC unexpectedly cut the RRR by 50bp, thereby releasing RMB 1.2 trillion of liquidity (about US$ 185 bn): the Hang Seng SH-SZ-HK 300 Index is currently up 0.90%, led by Hong Kong's battered market (up 1.28%)
FX
Yen, Swiss Franc, Euro Fall Against The US Dollar On Widening Rates Differentials
Pro-risk currencies like the Canadian Dollar and Australian dollar made good gains today, as core commodities like crude oil and copper rebounded after poor performances last week
